What is kpi in marketing

In order to choose efficient marketing KPIs , it is first necessary to answer some questions. What is the core business in my company? What results do I need to achieve for my company to grow? Do I want to sell more merchandise to generate leads or to generate subscriptions?

All this information will help you to choose marketing K PIs which match with your company objectives and environment. In this article, we have decided to focus on KPIs that matter for your online marketing strategy.

The purpose of measuring ROMI is to evaluate if marketing expenses contribute to profits. If you have a positive marketing return on investment , it means that your campaigns are bringing in more money than you are spending on them. Knowing the ROMI of your campaigns also helps you to better understand where you need to allocate your marketing budget to get the best results. The short-term ROMI is calculated by comparing revenue profits against marketing investment. Long-term ROMI can be used to determine other less tangible aspects of marketing effectiveness.

Indeed, if a marketing campaign does not generate a lot of sales, but increases mentions in social media, is it still considered a failure? It is therefore relevant to consider measures such as brand awareness in their ROMI indicators in order to quantify less tangible benefits and target future campaigns more effectively. The lead conversion rate represents the percentage of individuals or businesses that were potentially interested in purchasing your product or service and that end up converting to opportunities.

To calculate the — lead conversion rate you need to divide the number of leads converted to opportunities in a time period to the number of leads created in this same period and multiply the result by In order to maximize your lead conversion rate , it is essential to identify which marketing channels brings you the most qualified leads. Sales prospecting? It is necessary to calculate the average conversion rate for each of these channels to give priority to the most efficient and improve those which brings fewer opportunities.

Cost per lead is the cost you pay to acquire a prospect through Internet advertising. Knowing your cost per prospect allows you to make more strategic marketing decisions: these metrics will help you evaluate the effectiveness of your actions and keep control over your advertising budget.

To calculate your Cost per Lead you must divide your cost for each lead generation campaign on any paid channel by the total number of leads generated by that campaign. Dividing your cost per lead by marketing channel is a plus: it allows you to evaluate which campaign had the best performance and which channels you should prioritize. Customer Lifetime Value is a prediction of the profits generated by a company throughout its relationship with each particular customer.

Increasing the Customer Lifetime Value will allow you to maintain a link with your customers, reduce the rate of disengagement and enhance their satisfaction. It will also help you to estimate a reasonable cost per acquisition. See all integrations. We're committed to your privacy. HubSpot uses the information you provide to us to contact you about our relevant content, products, and services. You may unsubscribe from these communications at any time.

For more information, check out our privacy policy. Written by Rebecca Riserbato BeccaRiserbato. When I was cooking steak the other day, I had to use a meat thermometer to check and see if the meat was cooked all the way through.

As a marketer, instead of a meat thermometer, you're going to use key performance indicators KPI to measure success. Below, let's learn more about KPIs and review some examples of marketing KPIs that can help you improve your marketing.

A KPI is a key performance indicator that measures how your company is performing at achieving a certain goal or objective. There are KPIs for every aspect of business, whether it's financial, marketing, sales, or operational. Essentially, KPIs are measurable metrics that gauge overall performance over time. A great way to analyze and report on your KPIs is to create custom dashboards in your automation software.

For today's purposes, we'll focus on marketing KPIs, but to learn more about sales metrics, check out our ultimate guide. Customer acquisition cost CAC measures the amount of money it takes to convert a potential lead into a customer. This metric can be used to improve your marketing because it helps you make important budgetary decisions. For example, you don't want to spend too much money acquiring a customer if it won't result in a profit. Basically, this helps businesses decide how much money to spend on attracting customers.

Another metric that can help determine how much money to spend on marketing is the lifetime value of a customer. This metric indicates the total amount of revenue a business can expect to make from a single customer. This is a useful metric to compare to CAC. For example, if your CAC is higher than your LTV, then you're probably spending too much money acquiring your customers. Return on investment in marketing refers to the amount of money you gain compared to the marketing cost.

To calculate this, you'll subtract marketing expenses from sales growth and then divide that by marketing cost to get the return on your investment. In marketing, keep in mind that it can be hard to directly attribute sales growth to a marketing campaign. If that's the case, you can subtract your average organic sales growth and marketing cost from your sales growth and then divide it by your marketing cost.

Return on ad spend is a more specific KPI that you can use to determine the success of your ad campaigns. This metric measures the revenue that's generated compared to every dollar you spend on an advertising campaign.

It's usually a ratio. That means your ROAS for that campaign is An MQL is a lead that has engaged with your company and could become a more serious prospect if you nurture that relationship.

This is a great KPI to measure because it helps your marketing team understand how many leads they're bringing in. Additionally, when compared to sales qualified leads see below , your marketing team can measure how many MQLs become SQLs and then customers.

If an MQL is nurtured correctly, then eventually they become a sales qualified lead. An SQL is a prospective customer that's ready to talk to someone on your sales team. They show performance related to specific projects and campaigns. Marketing metrics are numbers that should be consistently tracked to understand the status of marketing campaigns and whether they are helping to meet KPIs and business goals. Also, KPIs help you prove the value of your marketing campaigns to upper management and clients.

There are dozens of KPIs related to marketing. A conversion happens when a user takes a desired action. For your marketing campaigns, you can track a variety of conversions. A conversion could take place when someone:. The conversion rate is a percentage point that shows the number of conversions divided by the number of people who visited your website. A lead is when you gather contact information from a potential customer or prospect.

Leads are often categorized as:. The number of product demos presented to potential customers is a valuable type of product marketing KPI.